Correlation Between IShares Broad and IShares Nikkei
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By analyzing existing cross correlation between iShares Broad High and iShares Nikkei 225, you can compare the effects of market volatilities on IShares Broad and IShares Nikkei and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares Broad with a short position of IShares Nikkei. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Broad and IShares Nikkei.
Diversification Opportunities for IShares Broad and IShares Nikkei
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and IShares is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Broad High and iShares Nikkei 225 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Nikkei 225 and IShares Broad is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares Broad High are associated (or correlated) with IShares Nikkei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Nikkei 225 has no effect on the direction of IShares Broad i.e., IShares Broad and IShares Nikkei go up and down completely randomly.
Pair Corralation between IShares Broad and IShares Nikkei
Assuming the 90 days trading horizon iShares Broad High is expected to generate 0.29 times more return on investment than IShares Nikkei. However, iShares Broad High is 3.5 times less risky than IShares Nikkei. It trades about 0.05 of its potential returns per unit of risk. iShares Nikkei 225 is currently generating about -0.04 per unit of risk. If you would invest 586.00 in iShares Broad High on November 2, 2024 and sell it today you would earn a total of 3.00 from holding iShares Broad High or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Broad High vs. iShares Nikkei 225
Performance |
| Timeline |
| iShares Broad High |
| iShares Nikkei 225 |
IShares Broad and IShares Nikkei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Broad and IShares Nikkei
The main advantage of trading using opposite IShares Broad and IShares Nikkei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Broad position performs unexpectedly, IShares Nikkei can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares Nikkei will offset losses from the drop in IShares Nikkei's long position.| IShares Broad vs. iShares Govt Bond | IShares Broad vs. iShares Global AAA AA | IShares Broad vs. iShares Smart City | IShares Broad vs. iShares Emerging Markets |
| IShares Nikkei vs. iShares Govt Bond | IShares Nikkei vs. iShares Global AAA AA | IShares Nikkei vs. iShares Smart City | IShares Nikkei vs. iShares Broad High |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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